How does the level of information sharing influence satisfaction on supplier performance within a buyer-supplier relationship?
By
David Nijenhuis
S3134474
Van Speykstraat 48A
9726BN Groningen
d.r.nijenhuis.1@student.rug.nl
University of Groningen
Faculty of Economics and Business
26 May 2017
Thesis supervisor Pre-MSC Supply Chain Management:
Franciscus Bakker
Abstract
Include a summary (150 words): RQ, method, results, conclusions
Keywords: Sharing information, communication, supplier performance; strategic collaboration.
Table of contents
1. Introduction 3
2. Theoretical background 4
2.1 Information sharing 4
2.2 Supplier performance 4
2.3 Conceptual model of relationships 4
2.4 Hypothesis development 5
2.5 Conceptual model 5
3. Methodology 5
3.1 Research design 5
3.2 Research setting 6
3.3 Data collection 6
3.4 Operationalization of concepts and variables 6
3.5 Data analysis 7
4. Results and analyses 7
5. Discussion and conclusions 13
5.1 Discussion 13
5.2 Conclusion 14
5.3 Limitations and future research 14
5.4 Implications for theory and practice 14
6. References 15
7. Appendices 18
Appendix A. Information and description of organizations 18
Appendix B. Added interview questions 19
1. Introduction
In the 21st century, the ways in which organizations are related to each other changes continuously. Organizations can no longer count on traditional behaviours, who enable them to predict flows of information and relationships (Wind & Robert, 2010). According to Kraljic (1983) purchasing is in many companies a matter of routine. Companies annually negotiate with their suppliers and ignore or accept cost reductions. Nowadays, companies cannot allow purchasing to lag behind other departments in adjusting to international changes.
The Kraljic portfolio model provides a way for companies to identify and allocate different items a company buys into four quadrants. Companies also have implement relationship strategies to focus on relationships instead of items (Cousins, 2002). The purpose in a buyer-supplier relationship is to create value for each other. One party offers: products and services. The other party offers: payments and/or long-term relationship (Walter, Ritter, & Gemünden, 2001). Companies use relationship models such as those of Cousins, to help purchasing and supply chain managers to develop an effective relationship (Johnsen, Howard, & Miemczyk, 2014).
A lot of studies have been conducted to investigate the contribution of an effective relationship. The aspects are related to: duration, interdependence, trust (Handfield & Bechtel, 2002; Heikkilä, 2002; Griffith, Harvey, & Lusch, 2006), commitment, long-term orientation (Johnston, McCutcheon, Stuart, & Kerwood, 2004), and communication related elements such as information sharing and information technology capabilities (Huang, Lau, & Mak, 2003; Goffin, Lemke, & Szwejczewski, 2006; Sheu, Yen, & Chae, 2006). Information sharing can be related to internal integration as well as external integration. Internal integration refers to the relationships and trade-offs within a firm. While external integration refers to coordination from customers and suppliers (Stank, Keller, & Daugherty, 2001), but how is this aspect related to supplier performance. Supplier evaluations are used by buyers, to identify areas where performance is below the expected level. If the supplier is not able to improve the performance to the expected level, the buyer can decide to layoff this supplier and find another supplier (Johnsen et al., 2014).
Buyers and suppliers have similar perceptions on unambiguous supply chain attributes, but their perceptions differ about ambiguous attributes. Ambiguity can lead to misunderstanding or unawareness. If an attribute is ambiguous, perceptions can differ in two ways: buyers perceive an attribute more positively and asses it higher than their suppliers or, suppliers perceive an attribute more positively and give it a higher assessment Oosterhuis (2009). Moreover previous literature is inconclusive about how communication, also information sharing as ambiguity attribute influences satisfaction on supplier performance in a buyer-supplier relationship.
The purpose of this study is to investigate the relation between information sharing and supplier performance within a buyer-supplier relationship. Based on this the following research question is put into words:
How does the level of information sharing influence satisfaction on supplier performance within a buyer-supplier relationship?
The remainder of this study is organised as follows, in chapter 2 the theoretical background is provided with hypothesis development, and a conceptual model. Chapter 3 presents the methodology by outlining the data collection. Chapter 4 outlines the results and analyses performed to test the hypotheses and presents the results of the analyses. Lastly in chapter 5 the discussion and conclusions of this study will be described. Also remarks and comments on the limitations of the research will be mentioned and topics for future research are presented.
2. Theoretical background
2.1 Information sharing
Buyers and suppliers have to communicate in order to coordinate their activities, due to this they can make better decisions (Huang et al., 2003). Buyers and suppliers can share information about, operational- and innovation issues. Operational issues are matters such as sales, order status, delivery information, and production schedules. Whereas innovation issues are related to matters as product design, product development, and market development (Moberg, Whipple, Cutler, & Speh, 2004; Cannon & Perreault, 1999). A high level of information sharing indicates expanded sharing of information about: planning, process, production and sales. This could be done by the usage of an information system (e.g. enterprise resource planning system) or by phone or in face to face meetings. A low level of information sharing indicates little or no sharing of information about this aspects (Welker, Van der Vaart, van Donk, 2008).
2.2 Supplier performance
Supplier performance is an appropriate measure of relationship effectiveness in buyer-supplier relationships. (Cannon et al., 1999; Poppo, Zhou, & Li, 2016). Buyers are satisfied if the supplier is capable, cooperative, flexible, reliable, deliver their products/services at the right time, at good quality and think along with the buyer (Chen & Paulraj, 2004; Johnston et al., 2004). Supplier evaluations can be conducted to asses’ suppliers a method to do this is designing a vendor rating system. Buyers and suppliers can consider different things and can assess different aspects of supplier performance when evaluating it (Johnsen et al., 2014). In this research, the aspects used to measure supplier performance are: quality, delivery and costs (Carson, Madho, & Wu, 2006; (Lumineau & Malhotra, 2011).
2.3 Conceptual model of relationships
Figure 1 presents the relationship types according to Cousins (2002) and gives an overview, about how to manage relationships.
High
Level of dependency Opportunistic behaviour
Strategic collaboration
Traditional/ adversarial
Tactical collaboration
Low Low High
Level of certainty
Figure 1. A conceptual model of relationships
Explanation figure 1
Organizations are considered to be dependent on a partner when it is difficult for an organization to replace the partner, product, service or commodity item (Heide & John, 1988; Kumar, Scheer, & Steenkamp, 1995). Buyer dependence is the difficulty a buyer experiences in switching to another supplier, whereas supplier dependence is the difficulty replacing a buyer with another customer. If one organization is more dependent on another, a power inequality exists. A reason for this could be the lack of alternatives (Kumar, et al., 1995).
Uncertainty is caused by fluctuation and variability in the demand of customers. When uncertainty is high, suppliers experience unexpected production costs or excess capacity. Buyers experience stock-outs or excess inventory (Walker & Weber, 1984). Uncertainty forces organization to forecast and make continuous adjustments (Fynes, de Búrca, & Voss, 2005).
Based on studies from (Handfield & Bechtel, 2002; Johnson & Sohi, 2003; Liker & Choi, 2005), companies should shift from an arm’s-length to al long-term collaborative relationship also called strategic collaboration. A definition of strategic collaboration is the way in which organizations buy and sell products and services. Companies involved in a collaboration are often part of a network of organizations brought together to be more competitive and create value for their customers (Wind, et al., 2010). A strategic collaboration can deliver advantages to companies (Mentzer, Foggin, & Golicic, 2000), the collaboration will help to coordinate efforts and investments leading to higher profit and a greater competitive advantage over time (Jap, 1999). According to the literature above, this research focusses on information sharing in a strategic buyer-supplier relationship.
2.4 Hypothesis development
Cannon et al., (1999) stated, the closer a relationship is this does not necessarily means higher performance for the buyer. Suppliers in the buyer’s current network offer only necessary information and transfer less new skills and information to the buyer, leading to reduction in performance (Yang, Lin, & Peng, 2011). Related to this literature and the research question, this study hypothesise the following.
Hypothesis 0:
A high level of information sharing in a strategic buyer-supplier relationship has no negative positive relation to the supplier performance.
Hypothesis 1:
A high level of information sharing in a strategic buyer-supplier relationship has a negative positive relation to the supplier performance.
2.5 Conceptual model
In this paper, the central concept is supplier performance in a strategic buyer-supplier relationship. The factor which influences this concept is information sharing. The explanatory mechanism can be explained as follow, if companies have a high level of information sharing. This will have a positive effect on supplier performance. These companies benefit from an efficient relationship, which includes improvements in costs, delivery, flexibility and quality (Hult, Ketchen, Cavusgil, & Calantone, 2006).
Figure 2. Conceptual model
3. Methodology
3.1 Research design
Qualitative research is grounded on gather data and information. It is not about facts or numbers, but about the “why” and “how”. It must be emphasized, it is in general not possible to decide whether qualitative or quantitate studies are better or more useful (Blumberg, Cooper, & Schindler, 2014).
There are no pre-determinates for the appropriateness of either a qualitative or a quantitate study. However quantitative studies seem to be more common in economics and qualitative studies in anthropology (Blumberg et al., 2014).
3.2 Research setting
Three companies are selected, based on the following criteria: The place of business of the company, size of the company, because there must be a collaboration (strategic collaboration) with other companies, if the companies would like to participate in this research and if they are able to make an appointment within the specified period between March 15 and April 10. Due to the criteria above, the sample for this research exists of companies which all do business in the tertiary sector. In the tertiary sector companies do business with each other and perform the following activities: Transportation, services, wholesale trade and retail trade (Kenessey, 1987). The decision to focus on the tertiary sector is because of convenience and access to data. The first company is a logistics services provider which delivers victuals to their customers. The second company delivers/sells kitchen equipment to their customers and the third company delivers/sells home furnishings to their customers. Further information about the companies is provided in appendix A.
3.3 Data collection
A personal interview also called face-to face interview is conducted to obtain information for this research paper. The interviewees are typically strangers and the interviewer controls the topics and patterns of discussion. The consequences of the interview are usually insignificant for the participant, who is asked to provide information, but has little hope of receiving any immediate benefit from this cooperation. An interview has advantages, as well as disadvantages. The greatest advantage is the depth of information and detail that can be gathered. It exceeds the information collected from telephone and surveys. The interviewer can also do more things (e.g. ask to explain things, add additional questions) to improve the quality of the information received. The biggest disadvantage from a personal interview is, they are costly in terms of money and time (Blumberg et al., 2014).
Three interviews will take place, one person per company will be interviewed. Preferably this is the person who is most concerned with the buyer-supplier relationship, because this person is most knowledgeable, less biased and will give more access to data on the buyer-supplier relationship (Poppo et al., 2016). The interviewees are informed about the confidentiality of their responses, and are offered an incentive in the form of a gift and summary report. After the interview is scheduled, the interviewee received an interview guide with the topics and questions for the interview. An English version of the interview guide was published and additional questions are added. Subsequently, the whole interview guide was translated into Dutch, because the interviewed organizations are Dutch and the interviews will take place in Dutch. To ensure the content and quality an independent native speaking American is asked to check the translated interview guide. During the interview, the respondents are asked to answer the interview questions based on one buyer-supplier relationship.
3.4 Operationalization of concepts and variables
Palmatier, Dant, Grewal & Evans (2006) investigated relational mediators in a meta-analysis. Their purpose was to help managers and researchers improve the effectiveness of their relationships. They found that “communication”, “sellers expertise” and “relationship investment” are most effective, dependence is semi effective and conflicts are detrimental for a relationship. According to (Childerhouse & Towill, 2002), uncertainty is an important attribute for the integration level in a buyer-supplier relationship. Based on this information, questions about this topics were ask during the interview. Communication: information sharing about planning, process, production and sales; Dependence: positioned related to cooperative organization, comparable products/services;
Conflicts: work together, frequently, protocols deal with conflicts; Uncertainty: products/services obsolescence, predictability. An item scale adopted from (Chen et al., 2004; Kotabe, Martin, & Domoto 2003) is used to measure supplier performance. This scale is selected because it is an appropriate measure of supplier performance and help to reduce ambiguity. According to Carson et al., (2006); Lumineau et al., (2011), supplier performance is examined with respect to quality, delivery and costs. This decreases the possibility that suppliers exploit their existing relationships and become less efficient in collaborations. The scale is measured on a six-point Likert-scale where ‘1’ represents extremely dissatisfied and ‘6’ represents ‘extremely satisfied’. The respondents are asked to evaluate the degree to which their firms are satisfied with their suppliers on different aspects (if applicable). The additional questions can be found in appendix B.
3.5 Data analysis
After the interviews took place they are transcribed, this can be done by transcribe the entire interview or transcribe the main parts and summarizing the irrelevant parts (Blumberg et al., 2014). For the three conducted interviews is decide to transcribe the whole interview. Coding is a technique to interpret transcripts the aim is to reduce and structure information. Coding describes the labelling of information, the labels are related to a single word or paragraph what that piece of information is about (Blumberg et al., 2014). Also transcripts from fellow students are used, this transcripts are chosen based on companies who are doing the “same” or “related” business to companies interviewed for this research. After all the transcripts are collected they are coded in the program Atlas.ti. This program is a tool to find linkages/relations between different concepts and variables. Coding words use for this research are presented in figure 3.
Figure 3. Coding tree
4. Results and analyses
The following paragraphs present the finding from the different investigated buyer-supplier relationship. Figure 2 givens an overview of the information sharing within different buyer-supplier relationships. Figure 3 shows the comparison of satisfaction on supplier performance within different buyer-supplier relationships. Figure 4 presents an overview of additional buyer-supplier relationships and the comparison of their performance.
Logistics service provider
Operational information
Once in four week, daily between the different departments. Operational personnel knows what is expected from them. The expectation from them are to help each other with completing/delivering the orders.
Strategic information
Strategic meetings take place one or two times a year with board of directors. It depends on the situation who takes initiative, often the buyer has the initiative.
Reflect at the way to operate, communicate and collaborate
The main goal is to satisfy customers. From ours suppliers perspective this are retailers and for us it is satisfy the supplier. In this relationship this it achieved with a lot of communication and meetings. This is very important because if changes occur it is important to be aware of the consequences.
Supplier performance monitoring
There are three type of planned meetings: Strategic these take place one or two times a year with board of directors. Tactical four time a year between warehouse manager and Suppliers supply chain manager. Operational meeting take place once in four week. Daily communication between the different departments from us operations office and customer services. With supplier department which is operations office from ZFG.
The control measures for this relationship are the key performance indicators (KPI), they are part of the contract. Related to transport “timeliness” is important. Related to warehousing “on time in full” (OTIF) is important.
Performance evaluation
This is evaluated in the tactical and operational meeting, which are four time a year once in four week.
Satisfaction supplier
We are satisfied with this relation/collaboration. When we start we had a revenue of 4 million and the max was 8 million. Nowadays we have a revenue of 6 till 6,5 million so in between.
Kitchen equipment
Operational information
Usually, we have weekly contact, (not about contract) but this is pure about operational issues.
Strategic information
There are a lot of products in a platform, to develop and make tools for this products costs around 80.000 euro, this is not a one year investment. The supplier is chosen with the idea to develop a long term collaboration. The buyer has the initiative, every year plan a meeting to talk about contract conditions.
Reflect at the way to operate, communicate and collaborate
There are no agreements about these aspects. If a project runs according to plan, you do not hear anyone. If some delays occur and you are not able to meet the planning then actions have to be taken how to get back on the right track.
Supplier performance monitoring
Usually we do not check inbound products/components on a daily basis, in 2015 SAP was implemented, since then this was not necessary any more, but right now we check everything from this supplier, because we have a lot of quality problems with some parts, these parts have to be paint in Germany.
The control measures are appointments made about prices. The information is fixed and is available in SAP.
Performance evaluation
At this moment we do not have a tool to assess suppliers, because this has no priority. Due to the fact we have some problems with our supplier this is a lack of evaluating relationships.
Satisfaction supplier
Still satisfied, despite of the problems we have. In terms of relationship this problem gets solved in the right manner. Of course there are two options: quit the relationship or remain. The easiest solution is remaining we then have to buy new tools. If we quit we have to search for another supplier.
Home furnishings-Eijerkamp
Operational information
An electronic data interchange (EDI) system is used in this relationship to exchange information with this supplier, a lot of information is available in this system. The system is also transparent everything is clear.
Strategic information
Often the account manager has the lead. This is an employee from the supplier who is concerned with managing this relationship. Usually we have monthly meetings, but it depends on the strategic choose.
Reflect at the way to operate, communicate and collaborate
Four times a year, every quarter we arrange a meeting, during this meeting we evaluate the bonuses and investigate where adjustments have to make (e.g. how we can help our personnel with their work).
Supplier performance monitoring
In this relationship logistics performance indicator (LPI) and key performance indicator (KPI) both are used to monitor the process.
For this relationship the control measures are the figures about revenue, bonuses and sales figures. This information is available in our enterprise resource planning (ERP) system SAP. We do not have inventory from this supplier, only our showroom inventory. We order and in three weeks they deliver the product (also customized orders).
Performance evaluation
Evaluation of the performance is four times a year. The decisions to do this is, otherwise the timeframe is to short, and you only look at details, not about the overall performance.
Satisfaction supplier
Good, satisfied with the relationship. However I prefer if the supplier become more flexible and less bureaucratic. This gives us the possibility to react on customers and the market.
Figure 2. Comparison of information sharing within different buyer-supplier relationships
Figure 3. Comparison of satisfaction on supplier performance within different buyer-supplier relationships
Satisfaction supplier
I am very satisfied, because everything is running smoothly and there are no strange things. They have a good collection and this results in a good turnover.
Additional interview 28, Logistics
Operational information
On a yearly basis, it depends who has the initiative, most of the times the initiative is at our side.
You always speak about certain conditions and transport prices, which is always the subject. I also use it as an opportunity to look if there are any chances to widen our business and strengthen the collaboration.
Strategic information
We are changing it right now, it was once a year but we changing it from once a year to every quarter and maybe even more.
Reflect at the way to operate, communicate and collaborate
Yes, from need to know, too nice to know. This can improve our services and strengthen the relationship.
Supplier performance monitoring
We do have yearly meeting where we discuss performances on certain levels.
For this relationship the control measures are written down in the service level agreements, about when deliveries are delivered on certain times. We have a web based software program which gives our client all the information to check what we are doing and it is real-time. They chose us because we can do very fine distribution. The control measures are pretty strict. If we do not do that right, then somebody else can do it.
Performance evaluation
It is possible to adapt thinks the way is best for us or for the partner even though the evaluation of the contract is done on a yearly basis changes can occur during the year. Flexibility is a high good. We do exchange additional information which is not mentioned in the service level agreement. The frequency depends on type of circumstances that we have to address.
Satisfaction supplier
I am very satisfied, because we fulfil the problem for this customer who has already tried six or seven companies before who didn’t hold their promises but we do and I am satisfied with that, an improvement is that we could get the information a bit quicker from them.
Additional interview 29, Logistics
Operational information
On a monthly basis we exchange reports, there are also operational meetings. We have one operational employee at our office and one operational employee in-house of the customer. They exchange information, so there is a constant flow of information with the customer. If we have something troubles and we would like to discuss then we do it, and vice versa. There are no fixed meetings every month. Sometimes it is twice a month and sometimes is once in two months. We exchange information with the partner frequently, we meet people from the customer, we have daily communication, and there are no barrier we can walk in and out in their company and vice versa.
Strategic information
We deal with a seasonal business, so now the season is starting. The weather is picking up and during the good weather there is not sufficient time to exchange strategic information.
Reflect at the way to operate, communicate and collaborate
Only if they want to share it otherwise they will not. For instance, last year they start with specific project to change the logistics operation. Then we receive an announcement. At an operational level the information sharing is faster but in a strategic level it takes time.
Supplier performance monitoring
We monitor our operation and report to the customer because they expect from us to do.
The control measures for this relationship are key performance indicators like “delivery time” and “loading meters”. We actually do not have this fixed in a contract, we work with service level agreement, which is more or less the same but it is not a fixed contract with obligations. So “performance” is the only thing that is measured. The rates are agreed in the beginning of the year and each year the contract is revived.
Performance evaluation
It is evaluated on a yearly basis, even if the agreements are for three of four years.
Satisfaction supplier
It is a very important relationship for us. We do more outside the service level agreement. It is a very valuable customer for us throughout Europe. Unfortunately, they are always seeking for costs cuttings. We have ideas regarding this issue, I have already point them out, but they do not always listen to us and make their own decisions on this topic.
Additional interview 68, textile industry
Operational information
The account manager visits us three times a year. Often this meetings are about giving advice. Both companies could have the initiative. Sometimes it happens a specific product in the assortment of this supplier does not exist. This is a missing opportunity for the supplier so during those meeting I tell this to the account manager.
Strategic information
Not strategic but more in a different way. This supplier has two big showrooms in The Netherlands. In this showroom they receive customers and their entire collection is showed. If a customer comes to us and I don’t have a specific model available in my store I sent them to those showrooms. This is a special partnership because the supplier has the showroom but doesn’t sell/supply directly to the customer, it is always via a retailer.
Supplier performance monitoring
When the account manager never visits or does not give information about the products there is no feeling of support so the turnover/sales also will decrease. It is important the account manager cooperates.
There are two control measures in the contract. The first is price, at a certain moment the use of internet appears and prices were not fixed, but there is an unwritten agreement with other manufacturers and retailers, we do not fluctuate prices. The second is volume, when you cannot meet to sell a specific volume you will fall in another bonus margin. So the better you sell for a specific manufacturer the better attention you will get from the supplier.
Performance evaluation
The supplier organizes two times a year a “house show” during these shows the show new models/collections. After this shows we give feedback about new models. Feedback could be “We have this couch for 3 weeks and already sold it 10 times”. So there is a mutual exchange of information.
Figure 4. Comparison supplier performance additional buyer-supplier relationships
5. Discussion and conclusions
5.1 Discussion
This study investigated how information sharing influences satisfaction supplier performance in a strategic buyer-supplier relationship. Interview 68, textile industry is related to Home furnishings and the interviews 28 – , 29 Logistics are related to Logistics services provider. The degree of information sharing can be found in figure 2. The comparison of satisfaction on supplier performance within relationships can be found in figure 3 and 4.
Confirm high information sharing, high satisfaction
The Logistics services provider shares a lot information and has once in four week operational meetings and daily contact between the different departments, supplier score is (46). 29, Logistics exchange reports on a monthly basis and communicate on daily basis. There are also operational meetings, but these are not fixed. There are specific employees to manage this relationship. There is not sufficient time to exchange strategic information, because they deal with a seasonal business. They are very satisfied, resulting in a supplier score from (28). The relationship is important for them because the supplier is very valuable for them throughout Europe. These result confirm Cannon et al., (1999), who reason patterns of interaction clearly are preferred by buying firms and Cao & Lumineau (2015), who reason the buyer and supplier are dependent, which requires to share information and make adjustments where necessary. Another explanation can be Johnston et al., (2004), the sharing of strategic information, in situations where buyer and supplier develop joint responsibility for solving problems. Do not appear to have significant impacts on the buyer’s assessment of performance. Preston, Chen, Swink, & Meade (2017) indicate that knowledge enrichment is useful for improving existing operations and developing new opportunities.
Contradict high information sharing, low satisfaction
Kitchen equipment shares a lot information with their supplier, but their supplier rate is low (35) because the supplier has a lot of quality problems with some parts. Supported by Preston et al., (2017). The expectation that knowledge enrichment of the supplier is a significant means by which relational trust and shared norms affect performance. This is also confirmed by Yang, Zhang, Xie (2017) , the supplier is more likely to reduce information sharing with the buyer when the buyer-supplier relational strength is relatively high, while it will try to increase the information sharing when the relational strength is low. Rodriguez, Hemsworth, & Martinez-Lorente (2005) says that supplier development practices can improve supplier performance. Direct involvement in supplier activities, such as trips to the supplier plant and training or education of the supplier, all are important due to supplier performance improvements.
Contradict low information sharing, high satisfaction
Home furnishings shares less information, because they do not have inventory. Due to this it is not needed to share information about planning, production delivery and stock height. This has no influence on their supplier score which is (43). 68, textile industry has an account manager visiting them three times a year, during these meetings advice and feedback about collection is given. They do not share strategic information but visit supplier if customer would like to have specific products. This is a special partnership because the supplier has showrooms but does not sell/supply direct to the customer, it is always via a retailer. 68, textile industry is satisfied with the relationship everything is running smoothly and there are no strange things. They have a nice collection and the turnover is good. 28, Logistics shares operational information once a year. This meeting is used to look for opportunity to widen business and strengthen the collaboration. Currently adjustments are in sharing strategic information, this was once a year but would like to have it every quarter and maybe more. Their supplier score is 26. 28, Logistics is also satisfied, because they are able to fulfil the orders for this supplier, who has tried different companies. Which were not able to hold their promises, supplier score is 25. Confirm Johnston et al., (2004), they stated shared planning activities which drive performance assessments do not lead to satisfaction, while the degree of flexibility in the relationship does not affect performance but leads to satisfaction. Another explanation can be found in the results of Hartley, Meredith, McCutcheon, Kamath, (1997). They discovered that, in evaluating new product development process, buyers can be satisfied with the buyer-supplier relationship even when performance is low. Another research Preston et al., (2017), suggests that in relationships, buyers and suppliers can have different perspectives regarding relational benefits. This difference can refer to the fact buyers typically attend more dominant, with bargaining power than suppliers. Yang et al., (2017) mentioned, a strong connection between suppliers will enhance the normative pressure on an individual supplier’s sharing behaviour. A solid supplier network may not work effectively in facilitating each supplier’s sharing information with the buyer.
5.2 Conclusion
The aim of this study is to investigate how information sharing influences satisfaction on supplier performance in a buyer-supplier relationship. Using personal interviews of (6) different buyer-supplier relationship. This sample is not claimed to be representative but illustrates and empirically explores information sharing, in order to better understand the influence on supplier performance in a strategic buyer-supplier relationship. The research question can be answers is as follows:
How does the level of information sharing influence satisfaction on supplier performance within a buyer-supplier relationship?
By answering this research question, this study has provided one main contribution. The results suggest that there are different connections between a high level of information sharing and satisfaction on supplier performance. In some relationship their exist a positive relation, but some not. This depends on different aspects like: type of business, appointments and conflicts. However, companies who share less information are not less satisfied with their supplier performance than companies who share a lot information. Concluded, not all relationships confirm the theory which stated a positive relationship between de independent and dependent variable.
5.3 Limitations and future research
The greatest limitation from this research is, it exist of snapshots because the influence of information sharing is measure one moment in time. If information sharing changes from high to low what happens then to supplier performance. Furthermore supplier performance is assessed by one person and there is a differences in how critical someone is. Due to this facts this research does not prove so much. Future research should look at the effect of fluctuation in a high and low level of information sharing on supplier performance at the same companies and buyer-supplier relationships.
The sample for this research consists of Dutch organisations and only companies engaged in tertiary sector. Hence future research on information sharing in other sectors (e.g. primary, secondary and quaternary) is necessary to make more precise conclusions
Interviews conducted for this research focuses on the buyer perspective in a buyer-supplier relationship, additional interviews from fellow students consist of supplier perspective so the perspectives are mixed. Moreover these interviews are less applicable due to the fact these interviews are used for another research about buyer-supplier relationships. Future research should make a clear distinction between the buyer- and supplier perceptive.
The respondents were asked to answer the interview questions based on one strategic buyer-supplier relationship. From the additional interviews the type of relationship is not always clear. Future research should investigate different relationships types, according to (Cousins, 2002) this are, traditional collaboration, tactical collaboration and opportunistic behaviour.
5.4 Implications for theory and practice
This study presents an endeavour to investigate the influences of information sharing on satisfaction on supplier performance in a buyer-supplier relationship. Expected was a positive relation between the variable, but not all relationship confirms this. We now understand to a certain extent how information sharing influences satisfaction on supplier performance, but more research should be done to improve the outcomes from this study. Besides an academic contribution, this study is also relevant for managers who are managing buyer-supplier relationships. For practice, the results from this study highlight the concern of a high level of information sharing in managing buyer-supplier relationships and obtaining satisfaction on supplier performance. A buyer-supplier relationship is dynamic, mutual knowledge about each other’s processes makes it possible to link processes and coordinate the information channels between them. Sharing information reduces ambiguity and encourages solving conflicts. A useful tool to asses’ suppliers’ performance is a vendor rating system. This tool is used in an interdependency between a supplier and a buyer and should fit organizational requirements. In the B2B market, a suppliers rating is a representation of the buyers’ satisfaction with the supplier Mandave & Khodke, (2010). To asses supplier performance it is not only important to assess their quality, delivery, cost performances but also take information sharing in consideration (e.g. which information is needed to do business?) This results in less ad hoc communication and a more efficient supply chain.